95. But one does not need to go to section 6(1) of the 1998 Act to discover the obligation which the court had to fulfil in these circumstances. Its obligation is to be found in section 3(1). That subsection provides that, so far as it is possible to do so, primary and subordinate legislation must be read and given effect in a way that is compatible with Convention rights. A person who claims that a court or tribunal has acted in a way that is made unlawful by section 6(1) may bring proceedings under section 7(1)(a) in the manner provided for by section 9(1) and, if compensation is required under article 5(5), may be awarded damages under section 9(3). But a person who claims that a court or tribunal has failed to fulfil the interpretative obligation laid down by section 3(1) has no need to go to section 7(1)(a) for his remedy. The meaning and effect of legislation is a question of law, so if an error is made about this the ordinary avenues of appeal are available.

96. In my opinion the issue about retrospectivity in this case resolves itself into a question as to whether section 3(1) permits the court, when it is determining after 2 October 2000 whether section 127(3) of the 1974 Act is compatible with FCT's Convention rights, to hold that the rights and obligations of parties to the agreement are, as a result of the coming into force of the relevant provisions of the 1998 Act on that date, different now from what they were at the time when the agreement was entered into in January 1999.

97. The first thing to notice about section 3(1) of the 1998 Act is that, as to its temporal effect, it is entirely general and unqualified. But some guidance can be found in section 3(2)(a), which says that section 3 applies to primary and secondary legislation "whenever enacted". So at least it can be said that it was plainly not the intention that legislation which was enacted before 2 October 2000 should be immune from the interpretative obligation which section 3(1) lays down. It would have been surprising if the Act had that effect. It would have greatly emasculated the underlying concept of bringing human rights home.

98. Then there is the general presumption that legislation is not intended to operate retrospectively. That presumption is based on concepts of fairness and legal certainty. These concepts require that accrued rights and the legal effect of past acts should not be altered by subsequent legislation. But the mere fact that a statute depends for its application in the future on events that have happened in the past does not offend against the presumption. For a recent example of this point reference may be made to R v Field [2002] EWCA Crim 2913; [2003] 1 WLR 882 (CA). In that case it was held that the making of a disqualification order under section 28 of the Criminal Justice and Court Services Act 2000 against a defendant from working with children in the future did not offend against the presumption where the offending behaviour had occurred before that Act came into force. It illustrates the point that there is an important distinction to be made between legislation which affects transactions that have created rights and obligations which the parties seek to enforce against each other and legislation which affects transactions that have resulted in the bringing of proceedings in the public interest by a public authority. The concepts of fairness and legal certainty carry much greater weight when it is being suggested that rights or obligations which were acquired or entered into before 2 October 2000 should be altered retrospectively.

99. Account may also be taken of the purpose of the 1998 Act. Its long title states that it was intended to give further effect to rights and freedoms guaranteed under the European Convention on Human Rights. The rights to which the Act gives effect are rights guaranteed by the Convention which the United Kingdom has already signed and ratified. In R v Field [2003] 1 WLR 882, 896E-F, para 61 the Court of Appeal accepted a submission by the Secretary of State for the Home Department that the court should take a more relaxed approach to a potentially retroactive element in legislation where its intended purpose was, as it clearly was in the case of section 28 of the Criminal Justice and Court Services Act 2000, to protect children. I would apply the same reasoning to section 3 of the 1998 Act. Its purpose is to ensure that legislation is read and given effect in a way that is compatible with Convention rights, so far as it is possible to do so, whenever the legislation was enacted. To restrict the application of the interpretative obligation, without exception, to "events" that happened or "transactions" entered into on or after 2 October 2000 would be to introduce a restriction which is not stated expressly anywhere in the 1998 Act. A restriction in such absolute and all-embracing terms would seem to be contrary to the intention of the legislation and incapable of being read into it by necessary implication.

100. But the consequence of reading section 127(3) of the 1974 Act in a way that is compatible with FCT's Convention rights cannot be looked at without taking account of the effects of doing so on the other party to the transaction, Mrs Wilson. She too acquired rights as a result of the transaction, as well as FCT. The set of provisions of which it forms part, and on which she relies, were enacted for the protection of consumers. Section 61(1) provides that a regulated agreement is not properly executed unless it satisfies certain requirements. It must include a statement of all the prescribed terms, which include a term stating the amount of the credit: paragraph 2 of Schedule 6 to the Consumer Credit (Agreements) Regulations 1983. Section 65(1) provides that an improperly executed agreement is enforceable against the debtor or the hirer on an order of the court only. The amount of the credit in this agreement was incorrectly stated, so Mrs Wilson became entitled to the protection of section 65(1) as soon as it was entered into. What this right meant in her case was spelled out in section 127(3), which provides:

"The court shall not make an enforcement order under section 65(1) if section 61(1)(a) (signing of agreements) was not complied with unless a document (whether or not in the prescribed form and complying with regulations under section 60(1)) itself containing all the prescribed terms of the agreement was signed by the debtor or hirer (whether or not in the prescribed manner)."

101. Let it be assumed, then, that the effect of section 127(3) is to engage FCT's Convention rights and that it is possible to read and give effect to the subsection in a way that is compatible with them. This will, inevitably, have the consequence of removing from Mrs Wilson the protection which sections 61(1)(a), 65(1) and 127(3) were designed to give her when the agreement was entered into. It seems to me that the presumption against the retrospective effect of legislation ought to be given its full weight in these circumstances. The case may be regarded as a typical example of the situation where legislation in question affects transactions that have created rights and obligations which the parties to it seek to enforce against each other. I recognise that there may be cases (and I have referred to R v Field [2003] 1 WLR 882 as an example) where a more relaxed approach will be appropriate. There is an obvious attraction in a solution to the application of the presumption to the obligation in section 3(1) which depends on clear, bright line rules which do not admit of any exceptions. But rules of that kind would be bound to lead to unfairness in some cases or to have consequences that could not have been intended for other reasons. So I would prefer to base my decision in this case on the particular facts and circumstances. I would hold that the presumption would be violated in this case if section 127(3) were to be construed in FCT's favour in a way that deprived Mrs Wilson of the protection which it was designed to give her when she entered into the agreement on 22 January 1999.

102. It follows that, as a determination of the question whether section 127(3) of the 1974 Act could be read and given effect in a way that was compatible with FCT's Convention rights would offend against the principle that legislation does not have effect retrospectively, it was not open to the Court of Appeal in these proceedings to make a declaration of incompatibility.

The Convention rights issue

103. The question is whether the effect of section 127(3) of the 1974 Act in the events which have happened is to engage any of FCT's Convention rights. If I am right on the retrospectivity issue this question does not arise. But the Court of Appeal dealt with the question, so I should like to make these brief observations about it. The Convention rights that are in issue are those which are set out in article 6(1) of the Convention and article 1 of the First Protocol. The Court of Appeal asked itself whether the exclusion of what it described as "any meaningful consideration by the court" of the creditor's rights under an improperly executed agreement was legitimate, having regard to the fundamental nature of the right guaranteed by article 6(1), and it held that the exclusion of any judicial remedy engaged that article and also article 1 of the First Protocol: [2002] QB 74, 92B- 93F, paras 31, 32.

104. Article 6(1) of the Convention provides a guarantee to everyone of access to the court for the determination of his or her civil rights and obligations. As the European Court of Human Rights has explained, this provision must be read in the light of the rule of law referred to in the preamble to the Convention of which an integral part is the principle that a civil claim must be capable of being submitted to a judge: Golder v United Kingdom (1975) 1 EHRR 524, paras 35, 36. A provision which operated as a procedural bar to access to the court for the enforcement of a civil right would be engaged by this article. But it is for domestic law to determine the extent and content of a person's civil rights: H v Belgium (1987) 10 EHRR 339, para 40. The rights which article 6(1) guarantees are rights of procedural fairness. They do not guarantee that a person's substantive civil rights are of any particular character.

105. As the European Court said in Powell v United Kingdom, application no 45305/99,4 May 2000, unreported:

"For the Court, it still remains the case that an applicant must be able to demonstrate an arguable claim under domestic law that there has been a breach of a civil right actionable in law. It is still impermissible for the Court to arrogate to itself the task of creating in favour of an individual a substantive right where none is recognised under domestic law."

What article 6(1) seeks to do, then, is to protect the individual against anything which restricts or impairs his access to the courts for the determination of a civil right whose existence is at least arguable. But the precise scope and content of the individual's civil rights is a matter for each state party to determine: see also Matthews v Ministry of Defence [2002] UKHL 4, [2003] 2 WLR 435, 452-543, paras 49-53.

106. Article 1 of the First Protocol has a similar character. It does not confer a right of property as such nor does it guarantee the content of any rights in property. What it does instead is to guarantee the peaceful enjoyment of the possessions that a person already owns, of which a person cannot be deprived except in the public interest and subject to the conditions provided for by law: Marckx v Belgium (1979) 2 EHRR 330, para 50. Here too it is a matter for domestic law to define the nature and extent of any rights which a party acquires from time to time as a result of the transactions which he or she enters into. One must, of course, distinguish carefully between cases where the effect of the relevant law is to deprive a person of something that he already owns and those where its effect is to subject his right from the outset to the reservation or qualification which is now being enforced against him. The making of a compulsory order or of an order for the division of property on divorce are examples of the former category. In those cases it is the making of the order, not the existence of the law under which the order is made, that interrupts the peaceful enjoyment by the owner of his property. The fact that the relevant law was already in force when the right of property was acquired is immaterial, if it did not have the effect of qualifying the right from the moment when it was acquired.

107. The rights of property which are in issue in this case are those set in an agreement which is regulated by the 1974 Act. The Act subjects the rights of the creditor to restrictions in some circumstances. Section 65 declares that a regulated agreement which is improperly executed cannot be enforced by the creditor except by means of an order of the court, and section 127(3) declares that it is not to be enforceable at all except upon the condition which it lays down. The agreement which was entered into in this case was from the outset an agreement which was improperly executed. So it was always subject to the restrictions on its execution which sections 65(1) and 127(3) of the 1974 Act set out. I would hold that FCT's Convention rights under article 1 of the First Protocol are not engaged in these circumstances.

108. The Court of Appeal said that the effect of sections 65(1) and 127(3) was to deprive the pawnbroker of its ability to enjoy benefit from the contractual rights arising from the agreement or from the rights arising from the delivery of the pawn: para 32. But the fact is that FCT never had an absolute and unqualified right to enforce this agreement or to enforce the rights arising from the delivery of the motor car. Article 6(1) of the Convention and article 1 of the First Protocol cannot be used to confer absolute and unqualified rights on FCT which, having regard to the terms of the statute by which agreements of this kind are regulated, it never had at any time under the improperly executed agreement which it entered into.

109. As I would hold that article 1 of the First Protocol is not engaged in this case, I do not need to examine the question whether section 127(3) is compatible with the rights guaranteed by that article. Had it been necessary for me to do so, I would have reached the same conclusion as Lord Nicholls has done for the reasons he gives.

The reference to Hansard issue

110. One of the happy characteristics of the Human Rights Act 1998 is that it did not attempt to solve all the problems that were bound to arise as a result of giving effect in domestic law to Convention rights. Among these problems was the effect which its provisions would be likely to have on the relationship between the courts and Parliament. This was left to be worked out in accordance with familiar constitutional principles.

111. One of these principles, which has repeatedly been emphasised, is that legislation is the exclusive responsibility of Parliament. The judges' task is to interpret, not to legislate: Poplar Housing and Regeneration Community Association Ltd v Donoghue [2001] EWCA Civ 595, [2002] QB 48, 72-73, para 75, per Lord Woolf CJ; R v Lambert [2001] UKHL 37, [2002] 2 AC 545, 585C-D, para 79; In re S (Minors) (Care Order: Implementation of Care Plan) [2002] UKHL 10, [2002] 2 AC 291, 313E, para 39, per Lord Nicholls of Birkenhead. Another is that it is the intention of Parliament that defines the policy and objects of its enactments, not the purpose or intention of the executive. The courts for their part must respect this principle, which means that the legislative function belongs to Parliament not to the executive. Then there is the rule which article 9 of the Bill of Rights 1689 lays down that proceedings in Parliament ought not to be impeached or questioned in any court or place outside Parliament. For their part both Houses of Parliament abstain from discussing the merits of disputes that are about to be tried and adjudicated on by the courts: Erskine May, Treatise on the Law, Privileges, Proceedings and Usage of Parliament, 22nd ed (1997), pp 383-384, 452-453. As Lord Nicholls has said, all courts are keenly aware of the importance of the legislature and the judiciary each discharging their own constitutional roles and not trespassing into functions that belong to the other.

112. The question which the House Authorities have raised is therefore an important one, and the position needs to be clarified. It has been prompted by the use which the Court of Appeal made of Hansard in its examination of the question whether this was a case where it should defer, on democratic grounds, to the considered opinion of the legislature: [2002] QB 74, 94A-95D, paras 34-36. The Court of Appeal rejected the Secretary of State's submission that, because the legislation had been enacted, it must be taken to represent the considered opinion of the elected body and that it was not for the courts to question the basis upon which that opinion was reached: para 34. Having done so, it embarked upon an examination of the parliamentary debates on the Bill. It did this not as an aid to construction of the legislation as its meaning was not in doubt, but to discover the reason which led Parliament to think that it was necessary to enact section 127(3) and thus to deny to the courts the power to do what was just in the cases to which it refers: paras 35-36.

113. Mr Sumption QC for the House Authorities did not seek to question the use of Hansard for the limited purpose described in Pepper v Hart [1993] AC 593, although he drew attention to some of the conceptual difficulties. As I understand that decision, it recognised a limited exception to the general rule that resort to Hansard was inadmissible. Its purpose is to prevent the executive seeking to place a meaning on words used in legislation which is different from that which ministers attributed to those words when promoting the legislation in Parliament: R v Secretary of State for the Environment, Ex p Spath Holme Ltd [2001] 2 AC 349, 407-408. Mr Sumption recognised that the exception thus stated has commanded broad acceptance where it has operated as a kind of quasi-estoppel against the executive. He also recognised that Hansard might be referred to where a statement made by a Minister in Parliament was relevant to a challenge by way of judicial review to what he had done: see, for example, R v Secretary of State for the Home Department, Ex p Brind [1991] 1 AC 696. This was because what the Minister said in Parliament was evidence of why he acted as he did. The position was no different from what it would have been if his statement had been recorded in a letter. But Mr Sumption stressed that any such exceptions should be clearly defined and that they should be based on principle.

114. The concern which he expressed was directed to the use of Hansard in this case for the purpose of seeking to discover from debates in Parliament the reasons which Parliament had for making the enactment. He said that this was quite different from seeking to discover what words mean. It was one thing to refer to Hansard to ensure that legislation was not misconstrued in favour of the executive. That use could be said to be in support of the principle of Parliamentary sovereignty. It was another to refer to it in order to form a view as to whether Parliament had given sufficient reasons for doing what it did and, if not, whether the legislation was incompatible with Convention rights. To use Hansard in this way was to use it for a purpose which was adverse to the intention of Parliament.

115. Mr Sumption put forward two objections to this use of Hansard on grounds of principle. The first was that it involved examining the nature and quality of Parliament's reasoning in a case where there was no doubt about what Parliament had enacted. Where it was used for the purpose explained in Pepper v Hart there was a threshold that had to be satisfied - the test of ambiguity. Here there was no such threshold, as the suggestion was that Hansard could be resorted to however clear were the provisions set out in the enactment. The second was that its object was not to give effect to the will of Parliament but to measure the sufficiency of reasons given for the legislation against standards derived from the Convention. He said that this was contrary to article 9 of the Bill of Rights. It was not for the courts to consider whether speeches made during debates in Parliament had put forward Convention-compliant reasons for supporting it.

116. I think that there is much force in these criticisms of the approach which the Court of Appeal took to this issue. But it would be going too far to say, as Mr Sumption did, that there are no circumstances where use may be made of Hansard where the purpose of doing so is to answer the question whether legislation is compatible with Convention rights. The boundaries between the respective powers and functions of the courts and of Parliament must, of course, be respected. It is no part of the court's function to determine whether sufficient reasons were given by Parliament for passing the enactment. On the other hand it has to perform the tasks which have been given to it by Parliament. Among those tasks is that to which section 4(1) refers. It has the task of determining, if the issue is raised, whether a provision of primary legislation is compatible with a Convention right. It does not follow from recognition that there is an area of judgment within which the judiciary will defer to the elected body on democratic grounds that the court is absolutely disabled from forming its own view in these cases as to whether or not the legislation is compatible. That question is ultimately for the court not for Parliament, as Parliament itself has enacted. The harder that question is to answer, the more important it is that the court is equipped with the information that it needs to perform its task.

117. This, then, is the justification for resorting to Hansard in cases where the question at issue is not one of interpretation but whether the legislation is compatible. A cautious approach is needed, and particular care must be taken not to stray beyond the search for material that will simply inform the court into the forbidden territory of questioning the proceedings in Parliament. To suggest, as the Court of Appeal did at [2002] QB 74, para 36, that what was said in debate tends to confuse rather than illuminate would be to cross that boundary. It is for Parliament alone to decide what reasons, if any, need to be given for the legislation that it enacts. The quality or sufficiency of reasons given by the promoter of the legislation is a matter for Parliament to determine, not the court.

118. But proceedings in Parliament are replete with information from a whole variety of sources. It appears in a variety of forms also, all of which are made public. Ministers make statements, members ask questions or propose amendments based on information which they have obtained from their constituencies, answers are given to written questions, issues are explored by select committees by examining witnesses and explanatory notes are provided with Bills to assist members in their consideration of it. Resort to information of this kind may cast light on what Parliament's aim was when it passed the provision which is in question or it may not. If it does not this cannot, and must not, be a ground for criticism. But if it does, the court would be unduly inhibited if it were to be disabled from obtaining and using this information for the strictly limited purpose of considering whether legislation is compatible with Convention rights. This is an exercise which the European Court may wish to perform in order to determine, for example, whether the aim of the contested legislation was a legitimate one or whether an interference with the peaceful enjoyment of possession was justified: see James v United Kingdom (1986) 8 EHRR 123, 143, para 48; Mellacher v Austria (1989) 12 EHRR 391, 409, para 47; Ambruosi v Italy (2002) 35 EHRR 125, 131, para 28. It is an exercise which the domestic court too may perform when it is carrying out the task under section 4(1) of the 1998 Act which has been entrusted to it by Parliament.

The Dimond v Lovell issue

119. The Court of Appeal made it clear in its first judgment that it did not wish to arrive at a conclusion which permitted Mrs Wilson both to retain the car and to recover the £6,900 unless the statutory provisions left no alternative: [2001] QB 407, para 20, per Sir Andrew Morritt V-C. But it held, following Lord Hoffmann's observations in Dimond v Lovell [2002] 1 AC 384, 397-398, that the effect of section 127(3) of the 1974 Act was to render the agreement irredeemably unenforceable and that a claim for unjust enrichment must fail because this was precisely the consequence prescribed by Parliament.

120. Mr Crow for the Secretary of State submitted that Dimond v Lovell [2002] 1 AC 384 was distinguishable and that it should not be applied in this case. He pointed out that the transaction in that case was different from that which Mrs Wilson had entered into with FCT. In Dimond the payments which were in issue were the cost of hiring the replacement car. It was held that those payments were not recoverable as a matter of contract, and there was no basis for implying an obligation to pay which was contrary to the provisions of the statute. In this case Mrs Wilson's enrichment was not limited to the cost of the loan. It was not just that she was being relieved of the obligation of paying interest on it. Her enrichment extended to the principal of the loan itself, because the effect of section 127(3) was that she kept the sum of £5,000 as well as the motor car. He submitted that, while exoneration of the obligation to pay interest was plainly within the contemplation of the statute, retention of the principal sum which had been lent to her under the agreement was not.

121. At first sight there is, to say the least, something odd about the result that Mrs Wilson has achieved in this case. But the effect of the failure to comply with the requirements of the Consumer Credit (Agreements) Regulations 1983 was that the entire agreement under which FCT provided the loan to Mrs Wilson, having taken possession of her car in pawn, was unenforceable. The statutory bar on its enforcement extended to FCT's right to recover the total sum payable on redemption, which included the principal as well as interest. That is what the statute provides. I do not think that it is open to us to say that Parliament did not contemplate that the effect of this provision, which was to disable the creditor from recovering the principal of the sum lent as well as the interest on it, might be to enrich the borrower. Once that position is reached, the position is clear. The court cannot override the statutory provision by substituting a common law remedy.

122. As Lord Hoffmann pointed out in Dimond at p 398, the conclusion which he reached in that case was consistent with previous authority. In Orakpo v Manson Investments Ltd [1978] AC 95 the transaction entered into under which loans were made to enable the borrower to acquire and develop certain properties were held to be unenforceable under sections 6 and 13(1) of the Moneylenders Act 1927. The effect was to enrich the borrower, who had fallen into arrears of payments of interest and moneys due but was successful in his defence that all the transactions including those which provided security rights to the creditor were unenforceable. Lord Diplock observed that, while the Moneylenders' Acts were designed to protect unsophisticated borrowers from being overreached by unscrupulous moneylenders, they were capable of being used by unscrupulous borrowers to avoid paying their just debts to moneylenders. He considered whether a remedy in subrogation to redress the unjust enrichment might be available. But he concluded that, much as he should have liked to have done so, it was not open to him to mitigate the harshness to the moneylender and the undeserved enrichment of the borrower which had resulted from the technical failure to observe the provisions of the Act.